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Thursday, January 22, 2009

South Africa's government has come under fire for focusing too heavily on the upcoming elections and not enough on the economic challenges facing the country.

According to the DA, the ruling ANC needs to “pull its head out of the sand” and manage the economy during these tough times. The DA said that the ANC needed to provide concrete plans as to how they were going to ensure that local economy was protected from the international downturn.

The opposition finance spokesperson Kobus Marais said: “What we have received is political posturing from the ANC’s alliance partners and silence from those in government who are tasked with the management of our economy.”

Last week, ratings agency Moody’s painted a negative picture of government inaction towards the potential crises, saying there was need for decisive action to deal with threats of job losses and falling domestic and international demand.

According to Marais, the ANC’s recently-released manifesto had done nothing to map a way out of the crisis. “Ignoring the unprecedented risk aversion in the international capital markets, it sets out a wish list of fragmented policy goals that some economists have predicted will lead to R42-billion (about $4.2-billion) of additional expenditure. The ANC has not indicated how it will pay for its manifesto, but if it is to do so, it will need to either raise taxes or borrow more money from abroad.

“But the deteriorating economic climate will result in less money being available to be collected for tax, and risk aversion abroad makes it more expensive for us to borrow foreign money."

Marais also called on the ANC-lead government to minimize the perception of risk by “stridently confirming that our orthodox macro-economic policies will not be changed” after the coming elections.

Many analysts believe that the elections - expected to be in April - will see the ANC losing its Constitutional majority after a breakaway party, COPE, was formed. They said it would force the ANC to act more responsibly.

Marais added: “Our people cannot afford for our future prosperity to be compromised by the stagnation of a political movement paralyzed by its own internal political wrangling.”